MNI CNB WATCH: 25bp Cut To 4.00% Seen, Fresh Projections Due

MNI (LONDON) - The Czech National Bank is expected to continue fine-tuning its key two-week repo rate with a 25bps cut to 4.00% on Thursday, with headline inflation still close to the tolerance band around 2% despite some upward pressure from services, and with communications coming to the fore.

The CNB will also publish its latest macroeconomic projections, which may see a small increase in the outlook for inflation and a small downgrade to the growth outlook going into 2025. (See MNI EM CNB WATCH: More Easing, But Tight Policy Still Needed)

Overall, the CNB is expected to confirm its preference for adopting a cautious approach to monetary easing, with any action on Bank Board member Eva Zamrazilova’s recent suggestion that there could be a pause in the cycle likely deferred until December - if at all.

Equally, there is little possibility of the kind of larger cut envisaged in September by Tomas Holub - who will be replaced on the Board by Jakub Seidler ahead of next month's meeting.